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Former Feltex directors get costs award

Wednesday 22nd December 2010

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Five former Feltex Carpets directors are welcoming an award to them that will cost the Ministry of Economic Development $952,111.

The District Court at Auckland has ordered that the ministry pay the directors the amount as reimbursement for legal and other costs incurred by the directors in defending the case against them. They had sought total costs of $1.36 million.

Tim Saunders, Peter Thomas, David Hunter, Michael Feeney and John Hagen were charged under the Financial Reporting Act.

Saunders, the former chairman, said in a statement on behalf of the directors that he believed it was one of the highest cost awards ever in a criminal case in New Zealand.

There were two ongoing civil claims that have been brought against some of the Feltex directors.

"We are continuing to defend those claims, and are confident of successful outcomes in those cases also," he said.

In the judgment today, Judge Jan Doogue said that the way the prosecution conducted the investigation fell below what was reasonably required.

Saunders said the court's earlier decision confirmed that the directors acted honestly and carefully at all times and were not guilty of the charges alleged by the ministry.

"This further judgment now confirms that those charges should never have been brought, and that we should never have had to face the ordeal of a criminal trial. This is a further vindication of our conduct and we are very pleased with the outcome."

Feltex's share float in 2004 raised $250 million from mostly retail New Zealand investors and two years later it was in receivership. The business was sold to a rival and several factories were closed with the loss of many jobs.

Lack of investor confidence is now seen as a major issue for financial markets in New Zealand.

 

NZPA



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